OUE Q1 profits crashed 90.7% to $1.03m

It blamed a non-cash fair value loss on its investment in a mutual fund.

OUE's profits in the first quarter of 2018 plummeted by 90.2% in over a year from $11.06m to a mere $1.03m. Revenue was also down by 25.8% to $145.61m.

According to its financial statement, OUE attributed the steep decline in profits to non-cash marked-to-market fair value loss on the investment in a mutual fund in the current quarter.

Meanwhile, revenue was down due to the absence of the contribution from the development property division as OUE Twin Peaks were fully sold in October 2017. Excluding the development property division, revenue increased by $22m as higher contributions were recorded by all the business divisions.

Revenue from investment properties inched up by 2.2% to $69.53m thanks to the rental income from Downtown Gallery which opened in May 2017.

Hospitality revenue jumped 13.5% to $58.96m due to a better operating performance from both Mandarin Orchard Singapore and Crowne Plaza Changi Airport, as well as contribution from Oakwood Premier OUE Singapore, the serviced apartments at OUE Downtown, which opened in June 2017.

OUE noted that there was no contribution from the development property division in the current quarter as OUE Twin Peaks were fully sold in October 2017. "The revenue relating to the units sold under deferred payment schemes are deferred until completion of the sale of the unit although non-refundable deposits were collected," it added.

The revenue from the healthcare division of $9.84m pertains to revenue contribution from OUE Lippo Healthcare, which became a subsidiary of the Group on 2 March 2017. "OUE Lippo Healthcare derives its revenue from rental income from its nursing facilities in Japan, and from the operation of the Wuxi New District Phoenix Hospital in Wuxi, Jiangsu, China," the firm added.

Other revenue comprises mainly the contribution from OUE Skyspace LA, the observation deck at US Bank Tower, as well as food and beverages operations.